After Equity Option expiry today and into Month end, the technical rally induced by January effect could be fading. Commodities recent spike (on China reopening/inflationary) will certainly have an knock on seasonal effect in next Inflation data, Technically speaking BTP/Bund spread has done a double bottom, and we could expect a bounce from here (Italy widening...
Spread BTP-BUND and the Median Line. The inevitable( and bad) financial consequences of the political crisis in Italy. The Center Line - natural first target of the pattern is above 300 right now.
Admittedly, the EUR/USD is off of last week's highs, but it is nonetheless, still trading above 1.1400, despite the continued blow-out of Italian bond spreads to Bunds. This has not traditionally ended well! In previous published ideas, I highlighted technical reasons why I've been short EUR, in addition to the fundamental reason, primarily being the central bank...
The BTP/Bund spread is likely to be a key roadblock to the ECB pivoting too hawkish. Italy’s fiscal health remains the Achilles Heel of EU stability. Recent EUR strength is understandable given LaGarde’s hawkish presser, but BTP vulnerability ought to be a mitigating factor.
If Inflation is coming up and tapering occurs, TVC:BTPBUND what will happen with the BTP ?
Italian 10y vs German 10y yield spread is also back to support. Besides the outright initial short, I sell some BTP against Bund too.
The effects of the spread on the national deficit and public debt are not immediate, but they are seen when the next BTP is issued. If the spread is high when a new BTP is issued, the new bonds will probably adapt to the performance of the secondary market, costing the Government more. A BTP-Bund spread may also affect businesses and households, not just the...
We are approaching the target in the ABC sequence here from the highs at 187.250. The 76.4% retrace of the previous advance is also supporting underneath at 148.834. To put simply, it is worth considering that the market has fallen enough and I would recommend those on the sell-side to take some off the table with a cautious approach. We are likely to get an...
The graph is an update of the previous analysis and follows the spread between Italian BTP 10Y and German BUND 10Y with a timeline of the Italian government's announcement and the European Commission responses
The graph follows the spread between Italian BTP 10Y and German BUND 10Y with a timeline of the Italian government's announcement and the European Commission responses